Complexities and Controversies in Linking Human Resource Management and Organisational Outcomes.

Our understanding of the way in which human resource management (HRM) is

linked to organizational performance is still limited, despite recent advances that

use a quantitative approach to argue for a strong positive relationship between

'High Performance Work Practices' and firm financial performance. These studies

are limited by their reliance on a single informant in each organization, and their

emphasis on financial performance at the expense of a broader range of outcome

variables. This paper contributes to the debate by analysing in detail the human

resource policies and practices of one case-study organization over a two-year time

period, using a variety of methodologies and drawing on a broad range of informants

across the organization. Instead of devising a list of 'best practice' HRM

from the literature and testing its impact on performance, we instead invert the

question and take a firm that is financially successful and ask what HR policies

and practices it uses. We also examine the way in which these policies are enacted.

This methodology enables us to show that even successful organizations do not

always implement 'best practice' HRM, and that there is frequently a discrepancy

between intention and practice. Outcomes at the individual and organizational

levels are complex and often contradictory; we question the extent to which is it

possible or meaningful to attempt to measure the interrelationship between HRM,

at the level of the formal system, and organizational performance, without taking

into consideration the role played by the informal organization in the process and

implementation of HR policies.